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Ivahew [28]
3 years ago
13

Investment X offers to pay you $6,900 per year for 9 years, whereas Investment Y offers to pay you $9,300 per year for 5 years.

a. If the discount rate is 7 percent, what is the present value of these cash flows
Business
1 answer:
Oliga [24]3 years ago
7 0

Answer:

$44,955.10

$38,131.84

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Investment X

Cash flow each year from year 1 to 9 = $6900

I = 7%

PV = $44,955.10

Investment Y

Cash flow each year from year 1 to 5 = $9300

I = 7%

PV = $38,131.84

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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3 0
3 years ago
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Rainbow [258]

Answer:

True

Explanation:

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8 0
3 years ago
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If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock pri
Margarita [4]

Answer:

-1.9%.

Explanation:

The computation of the abnormal change in the stock price of ford should be given below:

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3 0
2 years ago
Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurre
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Answer:

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irina1246 [14]

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<h3></h3><h3>What do you understand by  Full-employment GDP?</h3>

Full Employment GDP is the fictitious GDP level that an economy would reach if it reported full employment or the GDP level that would result in zero unemployment. An economic scenario known as full employment occurs when all of the labor resources are being utilized as effectively as feasible. The term "full employment" refers to the maximum possible level of both skilled and unskilled workers in a given economy. Or more people will be required to produce the goods and services the more the economy produces. However, there will come a point at which all resources are used up and no more output can be created.

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